Finance committee wants report end of first quarter.
Reports suggest that the Irish Central Bank has until the end of March at which stage it has to provide the government with a comprehensive report on what specific targets it has set lenders regarding mortgage arrears.
The Oireachtas (Irish parliament) finance committee requested that the Central Bank provide a report at the end of the first quarter detailing how the regulator is monitoring financial institutions approach to mortgage arrears, particularly the level of engagement with institutions and what enforcement action is being taken.
Concerns have been raised as well about proposals which would allow banks to make unsolicited personal visits to the homes of people who are in arrears where they have been unable to contact them.
A spokesperson for the Money Advice and Budgeting Service (Mabs) is quoted as saying that “allowing such visits could put too much pressure on vulnerable consumers”.
The governor of the Central Bank Patrick Honohan has already stated to the finance committee that the targets are to simplistic an approach. His view is that an over-reliance on them simply encourages banks to “meet these in a way that does not deliver the goods”.
However, the new personal insolvency legislation which is supposed to come into effect sometime later this year would also mean that financial institutions would have to make permanent restructuring arrangements in the case of failing to reach agreements with defaulters. This would mean going through a process where they will not have the same control as they have presently.
So it remains to be seen how all this will pan out over the coming months. One thing is certain. Hard pressed borrowers are feeling a chill wind right now and banks (who caused most of the problem in the first place) need to use their heads because you can’t get blood out of a stone. The government needs to understand that as well.
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